Vornado Completes $500M NYC Refi

The 40-story office building is located in Midtown Manhattan at 330 Madison Ave. It's the fourth Manhattan asset the REIT or an affiliate has refinanced in the last eight months.

330 Madison Ave.
330 Madison Ave.

Vornado Realty Trust has added 330 Madison Ave. to its list of recently refinanced Manhattan office buildings, announcing that its 25 percent owned joint venture secured a $500 million loan for the 40-story office building.

The seven-year interest only loan matures in August 2024 and has a fixed rate of 3.475 percent. Vornado’s share of the net proceeds, after repayment of the existing $150 million loan and closing costs, was approximately $85 million. The previous loan from German bank Landesbank Baden Wurttemberg was originated in July 2015, according to Yardi Matrix data. The new loan was provided by Wells Fargo Commercial Mortgage Securities in a privately placed commercial mortgage security, the Commercial Observer reported.

The 845,000-square-foot building is located in Midtown between 42nd and 43rd streets and has Ann Taylor, CitiBank and Starbucks as ground-floor retail tenants. Built in 1965, it was completely renovated in 2011. Office tenants include HSBC; Guggenheim Partners; American Industrial Partners; Jones Lang LaSalle, which has its New York headquarters in the building, and Glencore, a Swiss commodities firm that took 60,000 square feet in April under a 12-year lease.

On a Roll

It is at least the fourth Manhattan property the REIT or an affiliate has refinanced in the last eight months. In June, Alexander’s Inc., a Vornado affiliate, completed a $500 million office refinancing of 731 Lexington Ave., realizing net proceeds of about $188 million after repaying the existing $300 million mortgage and closing costs. Bloomberg currently has its headquarters in the 54-story, 1.4 million-square-foot tower.

In December, the Paramus, N.J.-based REIT completed two refinancing deals. Vornado said it completed a $400 million refinancing of 350 Park Ave., a 571,000-square-foot building, realizing $111 million of net proceeds. Nine days later, Vornado announced it had completed a $625 million refinancing of 85 10th Ave., a 618,000 square-foot office building in Chelsea co-owned with Related Cos. Vornado, which owns 50 percent of the property, received $192 million in repayment of its loans to the entity from the proceeds of the refinancing. The REIT stated it would recognize a financial statement gain of about $161 million in fourth quarter 2016 and no tax gain. The 11-story building’s tenants include Google and the General Services Administration.

Manhattan Deals

Landlords at several other Manhattan office towers have also been refinancing loans in recent months. In June, Boston Properties completed a $2.3 billion refinancing of the 50-story, 2 million-square-foot General Motors Building at 767 Fifth Ave. Boston Properties, which owns 60 percent of the trophy tower, replaced a $1.6 billion loan that was maturing in October.

Earlier this month, Ivanhoé Cambridge and Callahan Capital Properties refinanced part of an acquisition loan for 85 Broad St., a 1.1 million-square foot office tower in Downtown Manhattan, with a $72 million green-tranche in a CMBS provided by Natixis.